1984 (1) TMI 28

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....ssment year 1972-73. The assessee-company manufactures gears. It is not disputed that it is a priority industry and is entitled to relief under s. 80-I of the I.T. Act. Under It his section it is entitled to deduction of an amount equal to eight per cent. of the profits and gains "attributable to" a priority industry. The assessee-company granted sole distributorship of its products to M/s. Macnei....

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....ur opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the interest of Rs. 1,10,000 received from M/s. Macneill & Berry Ltd., in pursuance of the distributorship agreement entered into by the assessee with the said company for the sale of goods manufactured by the assessee amounted to profits and gains attributable to priority industry ....

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....any was entitled to charge, interest at the prevailing rate of interest chargeable on its overdraft account by its bankers.. It was also provided that under certain conditions, the payment of interest may be relaxed by mutual consent. These provisions in the agreement indicate that the amount of interest was relatable directly to the earning of profits and gains by the assesseecompany. It was henc....